Software

Here are a few software programs that I have developed recently. Please feel free to download them and take them for a ride. No documentation or support is provided, but the programs are relatively easy to understand and use.

I plan to enhance these from time-to-time. If you have any suggestions or comments, I'd welcome your feedback. Just drop me a note at

Back in the 1970's when several of us were creating the first computer-based discounted cash flow programs (not an acceptable appraisal methodology at the time, by the way), we made a mistake that has persisted to this day. That mistake was to use a single discount rate for cash flows regardless of how distant in the future those flows might be received. Big mistake.

What we should have done was acknowledge the "time value of money" most easily expressed by reference to the Treasury Yield Curve, which shows on any day what the yield would be for a risk-free asset for a particular future period in time. Real estate assets are certainly not risk-free, but it is a relatively simple matter to add a risk premium to the Treasury Yield Curve to account for the increased risk of a real estate asset or lease.

That is the idea behind this program. You pick the risk premium for a lease based on a simple five-category risk profile. The risk premium is added to the Treasury Yield Curve for the day you chose and then all cash flows from the lease are discounted at the appropriate risk-adjusted rate for each month remaining, thereby producing a risk-adjusted present value for the lease. Actually, you get even more information from this exercise, but you'll have to try the program to find out what other goodies come from this improved discounted cash flow model. All this is described in a manuscript presented at the ARES Annual Meeting in April 2006: Real-Time Valuation: Breathing New Life into Moribund DCF Modeling

The latest version (build date: 6/28/06) adds the ability to duplicate market rent assumptions from one property to another thereby speeding the data entry process for similar properties like buildings in an industrial or business park. Also, a hard-copy printed valuation report is now available.

Mac OS X demo version including sample data: RTV_multi_Mac.
Windows demo version including sample data: RTV_multi_DOS.exe.

RSS (Really Simple Syndication) is a rapidly growing means of publishing information on the Internet. RSS is the underpinning for Blogs (short for Web Logs) created and published by individuals, by news organizations, and increasingly by corporations that wish to broadcast new or updated information over the Internet.

The real estate industry can get on the bandwagon too. To show how, I've created a demonstration that shows how a company could publish properties it has for sale and spaces within properties it has for lease. To see what all the buzz is about, point your W3C standards-compatible browser at my RSS real estate demo page and see how handy RSS can be.

The Firefox browser works perfectly, Safari includes RSS header information in its built-in reader, not the real estate-specific terms I've defined and that can be seen on the linked HTML pages (even the recent versions of Internet Explorer,however, seem problematic due to violations of W3C standards). Also, there are a variety of RSS news readers like NewsGator that can be used to explore my demo.

I've created an application that makes creation of the XML and associated files very simple. When finished, this demonstration will be offered to the OSCRE membership for their consideration. Due to its ease of use and popularity, I believe that RSS will be the preferred way to exchange standardized real estate information. Great progress is being made in the residential area. My demo is a proof of concept for commercial real estate.

Here is a schematic diagram of the process of promoting listings from backend systems, through a SQL database, into RSS RE Writer, and ultimately to documents ready for the Web. The second page shows how another application aggregates listings from the internet and puts them all into a master database that will be accessible from a simple web page.

A demo version (build date: 2/14/06 -- functional improvements, more standards compliance, and bug fixes) containing both Mac and Windows applications with associated files and a sample SQL database: RSS RE Writer.

In order to locate points on most maps like Google maps, you need to know the latitude and longitude. Several services are available on the Internet for performing this task. You are welcome to use the simple program I wrote to access the free service offered by Geocoder.US. Depending upon the address, you may not need to know all the address information. Try it. I think you'll like it.

Mac OS X demo version: LatLong_finder.
Windows demo version: LatLong_finder.exe.

If you look real closely at the typical Treasury Yield Curve, you'll notice that there are two inflection points, one between 1 month and one up around 7 to 10 years. The convex one around 7 to 10 years makes sense, but the concave one under a year suggests that there might be some easy money by arbitrage. I'm not an arbitrageur so I can't get rich off this observation, but I can create a simple model to estimate the entire yield curve.

The model that works exceptionally well is a third-order polynomial equation where the dependent variable is the yield and the independent variable is the natural logarithm of time. Try it for yourself and see how accurate, and I hope useful, this simple model can be.

Mac OS X demo version including recent yield curve data: T_Estimator.
Windows demo version including recent yield curve data: T_Estimator.exe.

Resampling techniques are simple, intuitive ways to develop statistical estimates from relatively small sample sets where you know little or nothing about the underlying distribution of the sample.

Mac OS X demo version including sample data: Resampling_Routines.
Windows demo version including sample data: Resampling_Routines.exe.